UPDATE: Johnny Depp is in Europe right now, but really wanted to make The Lone Ranger. According to one insider, “Let’s see how it all shakes out on Monday. There’s always a chance that it could go. You never know until you know.” The deeper story behind this production stoppage is about how movies are costing too much, studios are giving major pushback, and today’s backdrop of a crazy economy. Everyone involved is still intent on the project and still in discussions to see what can be done. But the studio’s concern is spending over $200M on a Western, even with Gore Verbinski and Johnny Depp and a comedic slant. So clearly Disney took drastic action. Now the studio and filmmakers are trying to figure out the next step, either to shop it elsewhere or put it back together at a later date at a lower budget.

EXCLUSIVE: In a stunning development, Disney has shut down production on The Lone Ranger, the Gore Verbinski-directed period Western that was to star Johnny Depp as Tonto and Armie Hammer as the title character. Jerry Bruckheimer is the producer and the script is by Justin Haythe. I’m told this all just happened, and Disney pulled the plug because of the budget. I’ve heard the filmmakers were trying to reduce the film’s cost from $250 million (some even say $275 million) down to $232 million. But it wasn’t the $200 million that Disney wanted to spend. And between Depp, Bruckheimer, and Verbinski, the gross outlay on the film is substantial.

When the plug was pulled, the film was still casting up, with Ruth Wilson, the serial killer from the BBC’s Luther series, set for the female lead. And The Lone Ranger was scheduled to be released Dec. 21, 2012, smack up against The Hobbit: An Unexpected Journey, which opens Dec. 14, and the Brad Pitt-starrer World War Z, which was just slated for Dec. 21. This becomes the second major Western-themed project to bite the dust, after Universal halted a mammoth adaptation of Stephen King’s The Dark Tower. And is it coincidence that The Lone Ranger halted right after another Western, Cowboys & Aliens, proved a pricey disappointment for DreamWorks and Universal?

Halting tentpole movies is certainly is happening with more regularity in Hollywood lately. Universal recently halted production on a version of At The Mountains Of Madness that Guillermo del Toro was going to direct with Tom Cruise starring, and it also halted an adaptation of King’s The Dark Tower that Ron Howard, Brian Grazer, and Akiva Goldsman were ready to do, in a trilogy of movies and two limited run TV series. And just this week, DreamWorks halted Southpaw, a boxing drama that has Eminem set to star in his first role since 2002’s 8 Mile with Antoine Fuqua directing. It’s clear that studios are making their bets more shrewdly, particularly with the economic uncertainty that has rocked the stock prices of parent companies of film studios. Even if it means bruised feelings from stars, directors and producers accustomed to having it their way.

This had to be an incredibly tough call for Disney’s Rich Ross and Sean Bailey, but they have several huge live-action bets on the table already. Budgetbusters include John Carter, the Andrew Stanton-directed adaptation of John Carter of Mars with Friday Night Lights‘ Taylor Kitsch in the lead role, which has a budget that has ballooned to around $250 million; and The Great and Powerful Oz, the Sam Raimi-directed James Franco-starrer, is hovering around $200 milllion. But principals Bruckheimer, Verbinski, and Depp have minted money when they’ve worked together for Disney. Bruckheimer is the longtime cornerstone producer on the Disney lot. Depp has starred in the studio’s all-time biggest films including Alice in Wonderland and the four Bruckheimer-produced Pirates of the Caribbean films. Depp and Verbinski teamed for three Pirates installments, grossing billions of dollars for the studio. And Verbinski most recently directed Rango, the Paramount film that is a frontrunner for Best Animated Film Oscar and which grossed $243 million worldwide. Disney has four of the 10 all-time top worldwide grossing films in Hollywood history, and three of them starred Depp. That includes Pirates of the Caribbean: Dead Man’s Chest, which Verbinski directed and which grossed $1.066 billion. The most recent Pirates installment also cracked the $1 billion mark this summer, and Disney’s only other film on that all-time Top 10 list is Toy Story 3.

The Lone Ranger has a long history, but Disney counted on Depp to make it relevant with a comedic twist. The series began on the radio in 1933, then became a TV series that ran from 1949-1957, and both were wildly popular as the masked Lone Ranger and Tonto fought crime in the Old West, with the Lone Ranger calling out “Hi Yo, Silver! Away!” as his horse took off.